Nigeria: Guidelines on nature and scope of tax compliance inquiry processes

Guidelines to provide clarity regarding nature and extent of inquiries related to desk examinations, tax audits, and tax investigation exercises

Guidelines on nature and scope of tax compliance inquiry processes

The Federal Inland Revenue Service (FIRS) released guidelines to provide clarity regarding the nature and extent of inquiries related to desk examinations, tax audits, tax investigation exercises, and other tax inquiry processes.

The main objectives of the guidelines are to clarify the nature and scope of the various tax compliance activities and eliminate potential conflicts and disputes between revenue officers. The key takeaways from the guidelines include:

  • Desk review and monitoring exercises
  • Tax audits
  • Tax investigations
  • Special tax crimes investigations
  • Transfer pricing audit
  • Turnover threshold determination

KPMG observation

These guidelines likely will help to optimize resources expended by taxpayers during tax inquiries and facilitate more efficient tax compliance exercises in the country. The guidelines would also help to eliminate unnecessary disputes between officers of the tax authorities. 

Tax professionals note that FIRS is focused on making tax administration processes increasingly real-time or close to real time with the introduction of technology.  Increased digitalization and implementation of analytical tools will significantly increase the efficiency and effectiveness of tax administration.

It is also essential for the FIRS to reconsider its comments on Turnover Threshold Determination in light of a recent judgment by the Tax Appeal Tribunal, as it appears to contradict the decision of the Tax Appeal Tribunal (TAT) in the case between Little Company Nigeria Limited (LCN) vs. FIRS when the TAT established that the transfer of LCN’s file between tax offices, based on FIRS guidelines and regulations without due consideration to the company’s registered address was in violation of the law. Read TaxNewsFlash

Read an October 2023 report [PDF 694 KB] prepared by the KPMG member firm in Nigeria


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